Anyone who follows financial services and fintech will notice a concentration on three topics: new technologies and how they might be used to improve existing services (robo-advice! blockchain for share trading! AI and ML for [insert just about anything!]); how much venture capital is being invested and what startups are getting funded; and how banks and other incumbents are setting up their own innovation labs and partnering with startups.
There is a missing piece to this puzzle. Customers. A significant opportunity and threat of fintech is to create entirely new products and services and business models that meet customer needs that are unmet or poorly met by the existing industry.
There are dozens of areas where a fintech startup might begin to do this (many already are) — millennials who are managing on variable incomes, money management for people with no job security, retirement saving for people who are self-employed and so not part of the superannuation guarantee, day-to-day money management for people living payday to payday, and so on and so on.
This process starts with understanding people and how they live their lives, and not with how technology can be applied within the existing industry structure.
If I was running a bank or wealth management company, I would be worried less by ‘disruption’ and more by getting out-competed by companies that understand the lives and needs of consumers and businesses much better. And who have the skills and resources to turns those needs into new products and services that are radically different from the existing product categories my organisational model has been hard-wired around (deposits, lending, insurance, wealth management).
And I would be hiring service designers whose remit is to rethink our products and services from the beginning, from understanding the financial lives of people and businesses.